Financial Best Practices for District Support Organizations

Financial Strategies for District Support OrganizationsNick Griswold, DirectorFinancial Services | South Redford School DistrictOctober 20121Financial Strategies for District Support Organizations | South Redford School District

1BackgroundBachelor of Science, AccountancyChief Financial Officer CertificationBeen in the District 4 yearsInternships with University, ISD, and LEA accounting departments.During internships audited internal departments for LEA and University.October 20122Financial Strategies for District Support Organizations | South Redford School District

DisclaimersIt is the districts opinion that district support organizations are self-governing entities that are not under the direct supervision and control of the district.As independent organizations, district support organizations need to establish their own internal controls to protect their organizations reputation and the reputations of their members.The information in this presentation is not a substitute for obtaining professional assistance when prudent.Conducting this presentation or any other support provided by the district does not make the district liable for the actions of the district support organizations.October 20123Financial Strategies for District Support Organizations | South Redford School District

What we will coverWhat are internal controls and how to document them.Financial best practices for district support organizations.How to coordinate to leverage district resources.Q & AOctober 20124Financial Strategies for District Support Organizations | South Redford School District

Internal ControlsWhat are they? | Why do we need them? | How do we document them?October 20125Financial Strategies for District Support Organizations | South Redford School DistrictDefinitionInternal control is a process effected by an entitys board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: 1) effectiveness and efficiency of operations 2) reliability of financial reportingFundamental ConceptsInternal control is a process.Internal control is affected by people.Internal control can be expected to provide only reasonable assurance.Internal control is geared to the achievement of objectives.Courtesy: Understanding Internal Control and Internal Control Services, AICPA, September 2009 [Ratcliffe, Landes]October 20126Financial Strategies for District Support Organizations | South Redford School District

How do we document internal controls?No wrong answers.

Make the process usable for your organization.

Ensure that processes are being followed after they are documented.

Excerpt from South Redford Business Office Manual:October 20127Financial Strategies for District Support Organizations | South Redford School District

Financial Best Practices for District Support OrganizationsOctober 20128Financial Strategies for District Support Organizations | South Redford School DistrictOrganizational StructureEach booster group should elect a treasurer who will keep financial records for the booster group. The treasurer should also be one of two co-signers on a booster group bank account check. The treasurer's records should show the amount of money earned from each fundraiser, a record of each deposit made and each check issued by the treasurer.No individual should realize personal gain from funds raised to benefit students.

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Budgeting | Financial ReportingThe booster group governing body should develop an annual budget. The budget should reflect established goals and should be developed collectively. After year-end, an annual report should be presented to the building principal and to the membership detailing the booster groups activities.Your governing board or responsible budget committee should approve payments before any payments are authorized or contracts for services are awarded.

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Budget ExampleOctober 2012Financial Strategies for District Support Organizations | South Redford School District11

Budgeting | Financial ReportingThe treasurer should maintain a set of records (i.e., chart of accounts) that clearly report all accounting activity for each separate fundraising activity. This enables revenues from x program to be matched against expenditures for x program.

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Back to Budget ExampleOctober 2012Financial Strategies for District Support Organizations | South Redford School District13

Concessions Revenue [cash in] Concessions Supplies [cost of goods]Concession Income = $500[revenue expense]

Budgeting | Financial ReportingThe booster group treasurer should issue financial reports quarterly to the booster group membership. At a minimum, these reports should identify fundraisers conducted, revenues received from each fundraiser, expenditures made relating to each fundraiser, and how profits were used or plan to be usedOctober 201214Financial Strategies for District Support Organizations | South Redford School District

Financial Reporting ExampleOctober 2012Financial Strategies for District Support Organizations | South Redford School District15

Banking | Cash AccountingTwo persons (adults) should count cash from fundraisers immediately after an event. Don't put you or your members in a position where their integrity may be questioned. Have two people perform this task. It is preferred that school personnel not be involved in handling booster funds.

October 201216Financial Strategies for District Support Organizations | South Redford School DistrictRemember: Receipts Starting Bank = Gross Receipts

Cash Accounting Worksheet ExampleABC Elementary PTOCash Accounting WorksheetOctober 23, 2012 Raffles1. Starting Ticket #__5203082. Ending Ticket # __5210103. Total Tickets (2-1) ___702

4. Total Tickets (3) 702 x $2.00/ticket = $1,4045. Total Cash Collected (Less $50 Bank) = $1,4016. Over/Short$ (3)

Signature 1______________________Signature 2______________________October 2012Financial Strategies for District Support Organizations | South Redford School District17

Banking | Cash AccountingDeposit slips should identify each check separately. This makes the task of tracking back payments easier.Funds from different fundraisers should not be commingled on one deposit slip. Use a separate deposit slip for each fundraiser or source of revenue. This will assist you in determining the profitability of a specific fundraiser.Deposits should be made daily when receipts exceed $500. Collections of amounts under $500 should be deposited at least weekly. Don't let funds sit idle. Invest them and keep them safe.

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Deposit ExampleOctober 2012Financial Strategies for District Support Organizations | South Redford School District19

Flower SalesList Deposit Description HereList each check on a separate line with check # and amount1523 $50 00Tip: Use duplicates and get a copy of this back as a receipt to attach to copies of check / other documentation

Payments | Writing ChecksNo checks should be issued without sufficient documentation (e.g., receipts). Receipts, contracts for goods or services, etc should be maintained by the booster group treasurer and available for audit.

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Payments | Writing ChecksPetty cash funds are discouraged. However, if the booster group governing board is of the opinion that a petty cash fund is necessary, the amount kept in petty cash should not exceed $25.00. If a petty cash fund is maintained, a journal should be kept by the treasurer showing the source of money kept in petty cash along with all disbursements, no matter how small. Receipts should be kept of all vouchers of disbursements from petty cash.

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Petty Cash ExpenditureOctober 2012Financial Strategies for District Support Organizations | South Redford School District22

October 1, 2012Nick Griswold10.00Ten and 00/100xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxOffice Supplies10 007 912 09

District ResourcesHow to coordinate and leverage district resources.October 201223Financial Strategies for District Support Organizations | South Redford School District

PurchasingDistrict can purchase from certain vendors with deep discounts from competitive bidding. Check with your building secretary (MiDeal, REMC, WCPC).District credit card can be used for online purchases. Payment to the school must be made when order is placed.October 201224Financial Strategies for District Support Organizations | South Redford School District

Audit | Financial EducationFinancial Services department staff are available to answer questions about accounting for your funds.Also available to audit your books at end of school year. Available throughout the year to conduct an audit when a treasurers or presidents term of office ends.Provide annual training seminar on proper accounting techniques and best practices.October 201225Financial Strategies for District Support Organizations | South Redford School District

Q & AQ & A | Final Thoughts | SurveyOctober 201226Financial Strategies for District Support Organizations | South Redford School District

Sheet1ABC Elementary School PTOBudget 2012-2013 School YearRevenueFall Cookie Fundraiser1200Movie Night Concessions900Walk-A-Thon2500Total Revenue4600ExpensesCookie Supplies650Concession Supplies400Walk-A-Thon Supplies400ELMO/Projector x22000Laminator Supplies800Misc Supplies200Total Expenses4450Increase/(Decrease) inOperating Funds150

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Sheet1ABC Elementary School PTOBudget 2012-2013 School YearRevenueFall Cookie Fundraiser1200Movie Night Concessions900Walk-A-Thon2500Total Revenue4600ExpensesCookie Supplies650Concession Supplies400Walk-A-Thon Supplies400ELMO/Projector x22000Laminator Supplies800Misc Supplies200Total Expenses4450Increase/(Decrease) inOperating Funds150

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Sheet1ABC Elementary School PTOFinancial Report - October 2012RevenueFall Cookie Fundraiser800Movie Night Concessions200Walk-A-Thon0Total Revenue1000ExpensesCookie Supplies0Concession Supplies300Walk-A-Thon Supplies200ELMO/Projector x20Laminator Supplies0Misc Supplies0Total Expenses500

Checks WrittenTo WhoForAmount#1501Nick GriswoldConcession Supplies300#1502StaplesParticipation Ribbons200

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